The Supreme Court Case That Could Upend Obama's Climate Agenda

President Barack Obama speaks at the southern site of the Keystone XL pipeline on March 22, 2012 in Cushing, Oklahoma.(Tom Pennington/Getty Images)

By agreeing to hear a narrowly focused challenge to one portion of the Obama administration's global-warming regulatory agenda, the Supreme Court on Tuesday cast uncertainty on the scope and timing of President Obama's ambitious efforts to fight climate change—an issue on which, like his signature health care law, he hopes to build his legacy.

In taking up the appeal, the Court declined to go as far as conservatives and industry groups had hoped, declining to review whether the government possesses the legal authority at all to regulate so-called greenhouse gases. Still, the case raises the question of just how far the administration can go to use that authority to impose regulations on major polluters such as factories and oil refineries.

The case highlights one of the signature difficulties of Obama's efforts to combat global warming. Absent action from a gridlocked Congress, Obama and the Environmental Protection Agency are attempting to use the existing authority of the 40-year-old Clean Air Act to write new rules governing climate change and carbon pollution. While the law gives the federal government the authority to do this, its statutes, which were written in an era before fears of the shifting climate, aren't clear on exactly how the law can be interpreted to counter carbon pollution—which may lead to legal vulnerabilities.

Environmental activists claimed a victory as the Court declined to take up cases questioning the legal underpinnings of the Obama administration's controversial new plans to roll out a series of EPA regulations that would cut carbon pollution from coal-fired power plants. Once finalized, the rules will likely freeze construction of coal plants and eventually lead to the shutdown of existing ones. Coal plants are the biggest contributors to U.S. carbon pollution. "By declining to hear those cases, they essentially upheld those [court rulings]—so they are the law of the land," said John Walke, an attorney with the Natural Resources Defense Council.

Oil, chemical, manufacturing, and other industry groups also celebrated, however, as the Court agreed to hear a challenge to one narrow piece of the legal architecture of Obama's strategy for combating climate change. If the high court, which is likely to hear the case in February or March, were to overturn that piece of the regime, it could throw elements of Obama's agenda into disarray, while limiting future administrations from regulating large-scale carbon polluters like oil refineries and factories.

ADVERTISEMENT

Both sides say there's a broad spectrum of possible outcomes before the Court. "It will really depend on how the Supreme Court writes the decision," said Jacob Hollinger, a partner in the energy practice at the New York firm of McDermott, Will & Emery, who was until August a senior EPA attorney specializing in clean-air issues. "It will depend on the logic of the decision. It could have a big impact or a very little impact."

At issue is the question of whether the EPA properly set up its regulatory scheme for major stationary polluters such as coal-fired power plants and oil refiners. In 2010, the EPA issued a regulation requiring carbon-pollution controls for vehicles, a rule which the Supreme Court upheld. The agency then contended that vehicle rule triggered a second batch of regulations requiring states to issue permits to control carbon pollution from industrial stationary sources. It's the legality of that trigger—from moving from vehicles tailpipe standards to permits for big, industrial stationary sources—that the Supreme Court will consider.

Roger Martella, who served as EPA's general counsel during the George W. Bush administration and now represents the American Chemistry Council, one of the plaintiffs in the case, said, "It opens up the door for the Court to consider what's always been the most controversial part of EPA's greenhouse-gas rules, which is using regulations for cars to trigger regulations for stationary sources. This is the guts of EPA's climate-change regulatory program."

Among the options available to the Court: It could uphold EPA's use of the car-to-stationary-sources "trigger," an ultimate vindication for Obama and environmentalists. It could broadly uphold the EPA's authority to regulate stationary sources, but direct the agency to do so using a different set of legal requirements—in other words, said Martella, "the Court could send them back to the drawing board." Or it could flat-out reject EPA's authority to regulate stationary pollution sources under that particular portion of the law.

It remains unclear what impact that would have on the Obama EPA's current climate-change regulations. The agency has issued new draft rules cutting pollution from new coal plants, and Obama has given it a tight deadline for more regulations—including a draft rule to be issued next June aimed at cutting pollution from existing coal plants.

"Usually this level of uncertainty puts things on hiatus for a time," Martella said. "The conventional wisdom is you wait and see what the Supreme Court decision is going to be. And there's no way to know how they could decide this."

Clarification: This post has been edited to clarify that the Supreme Court's decision not to take up key challenges to earlier major court rulings on climate change ensured that those court rulings now stand as law, but that the Supreme Court will take up the narrower question of whether it is legal for the Environmental Protection Agency to use carbon pollution standards for vehicles to trigger a requirement that states issue carbon pollution permits for stationary industrial sources of carbon emissions.